Bullish Article Meets Skeptical DeepValue Analysis on GM's Valuation and Risks

What happened

A Seeking Alpha article published on February 12, 2026, rates General Motors a Strong Buy, citing improving fundamentals, a forward P/E of around 6x, and management's guidance for 8-10% EBIT margins in North America by 2026. In contrast, the latest DeepValue master report, based on recent SEC filings and market data, rates GM as a Potential Sell, highlighting a premium valuation of ~27x trailing EPS and 8.7x EV/EBITDA with limited margin of safety. GM announced a $6 billion EV writedown and a $1.1 billion China charge in January 2026, yet reaffirmed 2025 EBIT-adjusted guidance of $12-13 billion, portraying this as disciplined restructuring. DeepValue's analysis points to fragile core profitability, with GM North America margins at just 5.8% in Q4 2024, far from the 8-10% target, and warns of recurring 'one-time' charges from EV and China operations. Despite the bullish narrative, GM's stock price has risen ~59% to ~$85 over the past year, embedding high expectations that leave little cushion for earnings misses or policy shocks.

Implication

The Seeking Alpha article's bullish stance overlooks critical risks identified in DeepValue's report, such as GM's heavy reliance on North American trucks and SUVs, which are vulnerable to policy changes and cyclical demand shifts. Despite management's guidance for 8-10% EBIT margins, actual margins remain low, and recurring charges from EV writedowns and China restructuring erode earnings stability. With net debt of $110.8 billion and annual capex of $10-11 billion, any shortfall in EBIT-adjusted or free cash flow could force cuts to the $6 billion buyback plan or dividends, undermining the capital return thesis. Market sentiment assumes sustained $12-13 billion EBIT-adjusted and contained EV losses, but filings show this is fragile, with potential for multiple compression if execution falters. Therefore, investors should consider trimming or avoiding exposure until GM demonstrates consistent margin improvement and reduced special charges, prioritizing risk management over optimistic valuations.

Thesis delta

The article suggests a thesis shift towards undervaluation and margin expansion, but DeepValue's analysis indicates no meaningful change; GM's core risks from EV transitions, China restructuring, and policy sensitivity remain elevated. The investment thesis should stay cautious, focusing on execution risks and potential downside, as the stock's current price lacks a sufficient margin of safety given ongoing challenges.